Social and Ethical Audit Report

Labour practices in our global supply chains

Gorman's parent company factory x have a long-held commitment to upholding safe and fair conditions for workers in its global supply chain.

The current ethical sourcing policy was developed in 2008 by an external consultant. it provides a framework for communicating our ethical standards to our manufacturers. using the ethical trading initiative base code as a guide, it references both local laws, the international labour organisation (ilo) conventions and principles of the united nations universal declaration of human rights.

The Policy

The policy addresses key criteria for the following areas:

Labour rights/ Freedom of employment

Freedom of association and the right to collective bargaining

Safe & hygienic working conditions

Regular employment

Child labour

Fair wages

Reasonable working hours

Harsh or inhumane treatment

Bribery & corruption

Non-discrimination

Fair and equitable treatment

Environmental compliance

The Procedures

Factory X and Gorman expect our manufacturers to implement and maintain systems for meeting the requirements stated in our Ethical Sourcing Policy. To monitor compliance, we have designed the following 3-step auditing process.:

Step 1: Factory Self-Assessment

All factories are required to complete a self-assessment annually; this includes the development of a Corrective Action Plan with timeframes for addressing issues.

Step 2: Factory X Audits

Factory X has an in-house bi-lingual team who conduct audits on a regular basis. Any corrective actions are addressed with the local manufacturer and a plan of action is agreed. A randomly scheduled audit follows to ensure that the corrective action takes place.

Step 3: Third-Party Audits

Random audits to ensure the accuracy of internal audits are also conducted by qualified and experienced third-party certification body.

All our auditors use the following scoring system to communicate results:

1

Meets or exceeds Factory X Ethical Policy Requirements

2

Meets the majority of factory x ethical policy requirements, with a corrective action plan developed that includes one or more minor issues.

3

Meets the majority of factory x ethical policy requirements with a corrective action plan developed that includes one or more major issues

Most factories that underwent a Qualspec audit scored 3. All issues relating to health & safety & collective bargaining have been resolved. We are still working with some factories to resolve wage and overtime issues.

2 factories received a rating of 5. issues identified related to safety including fire alarms and safety exit signs not being present. These issues were resolved in a timely manner at one factory.

1 factory that scored a rating of 5 did not respond to the corrective action plan in a timely manner. After numerous attempts to engage with the factory and failed attempts to organise a follow-up audit, over a 12-month period, Gorman upgraded their score to 7 and discontinued working with the factory.

The charts below provide an overview of the qualspec audit results:

Maintaining consistent relationships

Gorman is committed to maintaining, long-term relationships with our manufacturers.

Currently, the top 20% of suppliers are doing 80% or our business and we have been working with 66% of our factories for more than 5 years and 4 factories for over 10 years.

in 2017 we used 15 factories to produce gorman products. with the exception of socks (Taiwan), all our products are made in china (5 regions) &amp india(1 region). A list of our factories is available here.